Making good and timely decisions: 4 key principles

We’re all confronted on a daily basis with having to make decisions, both big and small, on a professional and personal level. We have all developed our own rules and criteria for taking decisions, particularly at a professional level where the consequences of a good or bad decision can obviously impact the success of the project we’re working on, impact our team, impact the company’s bottom line. We of course can use different methodologies and processes to help us prepare that decision. However, all of the tools and processes don’t replace the moment when we have to make that decision and we all have to make that decision and take responsibility for the results.

We’ve all worked for managers who have either “fired from the hip” and taken very fast decisions they regretted later on or on the other hand, bosses who continuously put off decisions until they had the right data and although they made the right decision, made it too late and their “analysis paralysis” led to failure. Decision-making is perhaps the key responsibility of every manager as everything comes down to making decisions on what strategy to implement, what actions to take, who to promote, who to recruit, etc.

So what makes a good and timely decision? What simple steps can we follow to try to avoid the trap of either “shooting from the hip” or getting bogged down in “analysis paralysis”?

On a recent visit to Google, Mike Useem from the Wharton School, discussed this question and set out some simple rules which we can allow follow to help us decide as leaders nd make good and timely decisions.

The case of General Gustavus W. Smith

Mike Useem begins his discussion by presenting the case of one General Gustavus W. Smith, a leading officer in the Confederate Army during the American Civil War, who has the dubious privilege of commanding the army defending the Confederate capital, Richmond, from a Union army twice the size for only a day. The Union army was seeking to overrun Richmond and capture Jefferson Davis, president of the Confederate States. Smith became commanding officer when his superior, General Joseph Johnson, was wounded seriously defending the approaches to Richmond.

Jefferson Davis, present at the scene, asked Johnson who should replace him and Johnson answered that his second-in-command, Gustavus W. Smith was able and competent and so, on the spot, Gustavus Smith won a battlefield promotion. Davis immediately asked Smith what his plan was to stop the Union army. Smith asked for some time to think on the matter. Displeased with the response, Davis nevertheless agreed. Davis returned the next day and asked again what Smith’s plan was. Smith is reported to have replied that he didn’t have one and asked Davis if he had any ideas on what to do. Jefferson replied yes and sacked Smith on the spot, replacing him with Robert E. Lee who was to remain Confederate commander throughout the war. Smith’s indecisiveness led to his downfall while Davis showed quick decision-making by replacing him on the spot.

This anecdote from the American Civil War has many key lessons from a HR and leadership perspective. Here are but a few key points:

1) Don’t wait for a crisis to discover if you have the right person for the job. Select and test your talent on an on-going basis.

2) History doesn’t tell us what the relationship between Johnson and Smith was like but one must ask why Smith did not at least try to implement the strategy of his superior. Was it because his superior hadn’t shared the strategy with him, depriving Smith of at least a plan that he had already studied? Whatever the nature of the relationship between Smith and his superior, this highlights the importance of involving direct reports in the elaboration of the leader’s strategy so that the strategy can be implemented even if its owner is incapacitated.

3) Have a succession plan with multiple successors for key roles. Davis was lucky to have Lee close at hand (Lee was his advisor) but what would have happened if Lee had not been in the role he was in?

For Mike Useem, Gustavus W Smith, demonstrated extreme indecisiveness in a moment of crisis. He had the same background as Lee, the same demeanor, the same qualifications, the same ability to think strategically but not the same decision-making abilities. Robert E. Lee retained command of the Confederate army throughout the war and demonstrated many times his ability to take good and timely decisions.

So what are some of the traits Robert E; Lee may have had which allowed him to make good and timely decisions?

Mike Useem defines 4 key principles which he offers as a template for good and timey decision-making:

Go for the 70% rule: 70% assuredness, 70% confidence, 70% due diligence, 70% consensus. The more important the decision, the more we tend to want to have all the data, perform all the preparation, increase of confidence of success but the search for perfection is the enemy of decision-making. The more perfection you seek, the more you risk falling into the trap of analysis-paralysis. The figure of 70% is not important and is only a metaphor for setting a level at which you feel you can take your decision as a calculated risk. Although consensus is always best, it is not always possible to have agreement from all parties and so it is inevitable to have to go with partial consensus.

Be clear-mindedand unambiguous about intent. Don’t micro-manager and assume you have good people on your team who will help you achieve your goal. Set a clear goal and communicate it to all.

Develop a tolerance for first-time errors. If you adopt the 70% rule above, you therefore need to develop a tolerance for error because errors are inevitable. However, what you can’t accept is the same error twice. Your team members need to demonstrate that they learn from their errors and don’t make the same mistake again. When an error is made, review the error with the team member and ensure that this error won’t be repeated.

Indecisiveness is fatal. A poor decision can always be corrected. No decision will always be too late unless no decision is a decision not to decide. Postponing a decision in the hope that events will deal with the problem is making oneself hostage to fortune.

Finally, if Jefferson Davis demonstrated good decision-making when he sacked Gustavus W. Smith and replaced him with Robert E. Lee, historians have criticized Davis for being a much less effective war leader than his nemesis Abraham Lincoln, which they attribute to Davis being overbearing, over controlling, and overly meddlesome, as well as being out of touch with public opinion, and lacking support from a political party (the Confederacy had no political parties). According to historian Bell I. Wiley, the flaws in his personality and temperament made him a failure as the highest political officer in the Confederacy. His preoccupation with detail, inability to delegate responsibility, lack of popular appeal, inability to get along with people who disagreed with him, and his neglect of civil matters in favor of military were only a few of the shortcomings which worked against him(paragraph taken from Wikipedia).

This portrait of Jefferson Davis would seem to suggest that to be a good decision maker, you do indeed need to develop your leadership skills by

applying the 70% rule(don’t get lost in detail for the “devil is in the detail”)

delegating responsibility effectively(as this speeds up decision-making and increases chances of success for many heads make light work)

accepting criticism and opposition (as “contrarian” views ensures that as many bad decisions as possible are avoided)

keeping touch with your internal and external customers by proactive listening and understanding what they expect as a result.

What are your ideas on the subject? What other simple rules would you add to the good and timely decision-making template?